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Out of the Wallet and into the Purse: Using Micro Data to Test Income Pooling

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  • Jennifer Ward-Batts

Abstract

This paper uses an exogenous change in the intrahousehold distribution of income, provided by a change in United Kingdom Family Allowance policy to test the income-pooling hypothesis implied by unitary household models. Expenditure shares are estimated for a wide range of goods using household-level data. Shifts in expenditure shares suggest that children and mothers benefited at the expense of fathers when this policy change shifted income within households from men to women. Similar shifts are not found among married-couple households with no children. This paper refutes income pooling, and confirms and extends results in Lundberg, Pollak, and Wales (1997).

Suggested Citation

  • Jennifer Ward-Batts, 2008. "Out of the Wallet and into the Purse: Using Micro Data to Test Income Pooling," Journal of Human Resources, University of Wisconsin Press, vol. 43(2), pages 325-351.
  • Handle: RePEc:uwp:jhriss:v:43:y:2008:i:2:p:325-351
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    1. Gary S. Becker, 1981. "A Treatise on the Family," NBER Books, National Bureau of Economic Research, Inc, number beck81-1, March.
    2. Paul A. Samuelson, 1956. "Social Indifference Curves," The Quarterly Journal of Economics, Oxford University Press, vol. 70(1), pages 1-22.
    3. Cragg, John G, 1971. "Some Statistical Models for Limited Dependent Variables with Application to the Demand for Durable Goods," Econometrica, Econometric Society, vol. 39(5), pages 829-844, September.
    4. Hoddinott, John & Haddad, Lawrence, 1995. "Does Female Income Share Influence Household Expenditures? Evidence from Cote d'Ivoire," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 57(1), pages 77-96, February.
    5. Bruce Bradbury, 2004. "Consumption and the Within-household Income Distribution: Outcomes from an Australian "Natural Experiment"," CESifo Economic Studies, CESifo, vol. 50(3), pages 501-540.
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